Short-time working 'deserves' government support

17 Apr 09

Business groups and unions have called on the government to implement a temporary short-time working scheme across the UK in the forthcoming Budget.

The TUC, the British Chambers of Commerce (BCC), the EEF, the Federation of Small Businesses (FSB) and The Work Foundation have written to the Chancellor outlining a plan under which the government would partially compensate workers for lost earnings where there was an agreed reduction in working hours and pay, and a commitment to training.

Such a scheme would be vital to keeping workers in employment and would help viable businesses survive during the downturn, the organisations argued.

The letter pointed out that similar schemes are already in place across the EU.

Short-time working arrangements reduce the risks of unemployment and are an investment in staff skills, since employees would use the sacrificed working hours to take part in government-backed training.

The organisations added that short-time working schemes would keep people in jobs, would allow businesses to retain skilled staff and would help the government cut down on the level of benefit payments that rising unemployment entails.

Brendan Barber, the TUC’s general secretary, said: “Introducing a temporary short-time working scheme would help businesses stem the flow of job losses. Such agreements provide a quick and effective way to cut costs for struggling businesses and give hard-pressed employees vital financial help.

“Short-time working schemes are working well across Europe and are preventing many thousands of unnecessary job losses. The government must provide ensure that UK businesses and workers have access to such channels of support.”

David Frost, the BCC’s director general, commented: “It is absolutely crucial that our economy’s skills base is protected during the downturn. The loss of skills, especially in manufacturing, will only act to stifle growth in the long-term.

“Successful initiatives from previous recessions should be revisited and applied to the present climate – a short-time working scheme is one of them.”

The FSB’s employment policy chair, Alan Tyrell said: “A short-time working scheme is something that would be of immense help to smaller employers in the UK during these difficult times.

“We must at all times avoid the direct and indirect costs of rising unemployment and this scheme will do just that.”

However, the Treasury looks likely to reject the idea of paying state subsidies to workers whose pay has been cut because of the costs involved and the doubts as to its real value in saving jobs.